| Dear members,
The Directors have pleasure in presenting their sixty-ninth Annual
Report together with the Audited Accounts of your Company for the year
ended 31st March, 2015.
FINANCIAL RESULTS
(Rs. in Lacs)
2015 2014
Profit/(Loss) before depreciation /
Exceptional items and taxation (3,411.77) (11,771.01)
Less : Depreciation 2,023.08 1,567.52
Profit/(Loss) before taxation (5,434.85) (13,338.53)
Add /(Less) : Exceptional Items 1,746.61 (306.21)
(3.688.24) (13,644.74)
Add/ (Less) : Provision for
Earlier Year Taxation - -
(3.688.24) (13,644.74)
Add/ (Less) : Deferred Tax Liability - -
Profit/(Loss) after tax (3,688.24) (13,644.74)
Add: Balance brought forward
from previous year (18,337.52) (4,692.78)
Add: Transferred from Depreciation Adjustments 75.94 -
(Less): Depreciation on Revalued Assets (817.64) -
Which the Directors have decided to
carry forward to the next year (22,767.46) (18,337.52)
PERFORMANCE REVIEW
Highlights of performance during the financial year 2014-15 are:
* Total Revenue from Operation of the Company is Rs..6,101.77 lacs as
against Rs..7,962.76 lacs in the previous year.
* Operating Profit / ((Loss) is Rs..(3,411.77) lacs as against
Rs..(11,771.01) lacs in the previous year.
* Profit / (Loss) before taxation is Rs..(5,434.85) lacs as against
Rs..(13,338.53) lacs in the previous year.
* Profit / (Loss) after Tax is Rs..(3,688.24) lacs as against of
Rs..(13,644.74) lacs in the previous year.
The performance of the Company for the year has not been very
encouraging as the markets did not support and the off-take of the
company's products also slowed down resulting in sluggish sales.
The Company is a referred company under the Sick Industrial Companies
(Special Provision) Act, 1985 (SICA) and the process of registering
the same in the Board for Industrial and Financial Reconstruction
(BIFR) is under way. The notices in respect of the same have already
been issued to all the stakeholders.
The company's main stay i.e. Silk Textiles have undergone sea change
in terms of tapering of demand on a year-to-year basis. As compared to
the previous year the sale of silk products have come down by more
than 15% - 18%. The resultant gap created is filled by low-end
products fetching a very meager realization. Your company in spite of
all the hardships and difficulties in the market has been diligently
introducing new designs and new blends and also exploring new markets.
FUTURE OUTLOOK
To bring down the cost of production, your company will have to
increase the scale of operation which requires infusion of machineries
and technology. But unfortunately, considering financial condition of
the company it may not be possible to undertake this exercise.
However, the management is doing its best by ploughing back the small
surplus created from weaving capacity and wherever re-engineering is
required, the same is being done. Within the limited scope under
restricted market condition, your management is very positively
responding to matching situation in the global market.
DIVIDEND
In view of the accumulated losses the Board of Directors does not
recommend any dividend on Equity Shares. The Board of Directors does
not also declare dividend on Redeemable Cumulative Preference Shares.
PUBLIC DEPOSIT SCHEME
During the year, your Company has not accepted any deposits. There are
no outstanding deposits as on date.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Sri G.D. Harnathka, Director of the Company retires from the office by
rotation and is eligible for re-appointment in accordance with the
provisions of the Act and Articles of Association of the Company.
The members approved the re-appointment of Sri S.S. Shah, Managing
Director for a period of 3 years effective from 1s September, 2014 to
31st August, 2017, during the year under review. Members also approved
the re-appointment of Sri. H.S. Gopalka and Sri R.S. Rungta,
Non-Executive Directors for a period of 3 years.
Requisite declarations from all the Independent Directors of the
Company confirming that they met the criteria of Independence as
prescribed both under the Act and Clause 49 of the Listing Agreement
with the NSE, Mumbai has been received.
Necessary policies and the criteria for the performance evaluation of
Directors as Individual, Board and Committees are devised by the
Company. Evaluation of Board and Committees are being done under best
practices prevalent in the Industry. The Company ensures constitution
of the Board of Directors with an appropriate composition, size,
diversified expertise and experience and commitment to discharge their
responsibilities and duties effectively. Nomination & Remuneration
Committee formulated by the Company's Board in accordance with the
provisions of Section 178 of the Companies Act, 2013 and Clause 49 of
the Listing Agreement evaluates the each individual whether they met
the specified criteria and provides valuable contribution to the
Company. At the time of appointment/re-appointment of Independent
Director, Nomination & Remuneration Committee assess the independence
of the directors as referred in Section 149(6) of the Companies Act,
2013 and Clause 49(II)(B) of the Listing Agreement and re-assess the
same when any new interest or relationships are disclosed by them. The
Independent Directors shall abide by the "Code of Independent
Directors" as specified in Schedule IV to the Companies Act, 2013.
Nomination & Remuneration Committee ensures that all the requisite and
applicable provisions of the Companies Act, 2013 rules and regulations
made thereunder and Clause 49 of the Listing Agreement as amended from
time to time are complied with.
DIRECTORS' RESPONSIBILITY STATEMENT
Your Directors state that:
i) in the preparation of the annual accounts for the year ended March
31,2015, the applicable accounting standards read with requirements
set out under Schedule III to the Act, have been followed and there
are no material departures from the same;
ii) that the Directors have selected such accounting policies and
applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year and of the
loss of the Company for the year under review.
iii) that the Directors have taken proper and sufficient care for
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities.
iv) that the Directors have prepared the accounts for the financial
year ended 31st March, 2015 on a going concern basis.
v) the Directors have laid down internal financial controls to be
followed by the Company and that such internal financial controls are
adequate and are operating effectively; and
vi) the Directors have devised proper systems to ensure compliance
with the provisions of all applicable laws and that such systems are
adequate and operating effectively.
CORPORATE GOVERNANCE
The Company is committed to maintain the highest standards of
corporate governance and adhere to the corporate governance
requirements set out by SEBI. The report on Corporate Governance as
stipulated under the Listing Agreement forms an integral part of this
Report. The requisite certificate from the Auditors of the Company
confirming compliance with the conditions of corporate governance is
attached to the report on Corporate Governance. A separate section on
Corporate Governance and Management Discussion and Analysis together
with the Auditors' Certificate confirming the compliance of conditions
on Corporate Governance as per Clause 49 of the Listing Agreement with
the Stock Exchange form part of the Annual Report as "Annexure
II".
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
All contracts / arrangements / transactions entered by the Company
during the financial year with related parties were in the ordinary
course of business and on an arm's length basis. During the year, the
Company had not entered into any contract / arrangement / transaction
with related parties which could be considered material in accordance
with the policy of the Company on materiality of related party
transactions.
Your Directors draw attention of the members to Note 41 to the
financial statement which sets out related party disclosures.
CORPORATE SOCIAL RESPONSIBILITY
The Company has formulated the Corporate Social Responsibility
Committee (CSRC) in consultation with the Board during the year
pursuant to introduction of Section 135 under the Companies Act, 2013.
Sri Sundeep Shah, Sri H. S. Gopalka and Sri G.D Harnathka are the
members of the CSRC. Since the Company has been incurring cash losses
in the last three preceding financial years, the Board does not
recommend any amount to be spent on the CSR activities. However the
Board ensures that once the Company will start earning profits, they
shall after taking into account the recommendations of the CSRC,
approve the Corporate Social Responsibility Policy of the Company and
shall disclose contents of such policy in its report and will also
place the same on the Company's website.
BANK LOANS
The One Time Settlement proposal given by the management to the banks
for the outstanding dues to them, have been in the process of
negotiation bilaterally with the Company. Two banks namely ICICI Bank
and State Bank of Hyderabad have settled on One Time Settlement basis.
Your management has paid the entire amount of the money to them.
Negotiation with the other banks on a bilateral basis is going on.
RISK MANAGEMENT
The Company has been addressing various risks impacting the Company
and the policy of the Company. During the year, your Directors made
sure that all the risks that the organization faces such as strategic,
financial, credit, market, liquidity, security, property, IT, legal,
regulatory, reputational and other risks have been identified and
assessed and there is an adequate risk management infrastructure in
place capable of addressing those risks.
The Company manages, monitors and reports on the principal risks and
uncertainties that can impact its strategic long term objectives. The
risk management process is reviewed periodically in order to keep it
aligned with the emerging risks across the globe. Various programmes
involve risk identification, assessment and risk mitigation planning
for strategic, operational, financial and compliance related risks
across various levels of the organization.
INTERNAL FINANCIAL CONTROLS
The Company has in place adequate internal financial controls with
reference to financial statements. During the year, such controls were
tested and no reportable material weaknesses in the design or
operation were observed.
DISCLOSURE OF PARTICULARS
Particulars of Energy Conservation, Technology Absorption and Foreign
Exchange Earnings and Outgo required under the Companies (Accounts)
Rules, 2014 is annexed as "Annexure I":
AUDITORS
Messrs B.K. Shroff & Company, Chartered Accountants, holds office till
the conclusion of the ensuing Annual General Meeting and are eligible
for re-appointment. They have confirmed their eligibility to the
effect that their re-appointment, if made, would be within the
prescribed limits under the Act and that they are not disqualified for
re-appointment.
The remarks of the Auditors regarding losses of the company, interest
on debt outstanding, reference to BIFR, provision for bad and doubtful
debts, recognition of Net Deferred Assets have been duly explained in
Note No. 33(b), 35, 36(a) and 37 to the accounts respectively.
COST AUDITORS
Pursuant to the Companies (Cost Records And Audit) Rules, 2014
notified w.e.f 30th June, 2014 Textile Industry has been exempt from
maintaining the cost records and for conducting the audit of such
records. However Your Company is continuing its association with M/s.
N. Radhakrishnan & Co., a firm of Cost Auditors, for assisting and
directing the Company with regard to allocation of direct and indirect
costs to the various products and suggesting various measures lowering
the cost without compromising with the quality.
SECRETARIAL AUDITOR
The Board has appointed Ms. Garima Gupta, Practicing Company
Secretary, to conduct Secretarial Audit for the financial year
2014-15. The Secretarial Audit Report for the financial year ended
March 31, 2015 is annexed herewith marked as "Annexure III" to
this Report. The Secretarial Audit Report does not contain any
qualification, reservation or adverse remark.
EXTRACT OF ANNUAL RETURN
Extract of Annual Return of the Company is annexed herewith as
"Annexure IV" to this Report.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
Your Directors appreciate the significant contribution made by the
employees to the operations of your Company during the period. In
terms of provisions of Section 197(12) of the Act read with Rules
5(1), 5(2) and 5(3) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, a statement showing the names and
other particulars and disclosures of the employees drawing
remuneration in excess of the limits set out in the said rules are
provided in the Annual Report.
Having regard to the provisions of the first proviso to Section 136(1)
of the Act and as advised, the Annual Report excluding the aforesaid
information is being sent to the members of the Company. The said
information is available for inspection at the registered office of
the Company during working hours and any member interested in
obtaining such information may write to the Company Secretary and the
same will be furnished on request.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
In pursuance to the provisions of section 177(9) & (10) of the
Companies Act, 2013, the Company has formulated a vigil mechanism
(whistle blower policy) for its directors and employees of the Company
for reporting genuine concerns about unethical practices and suspected
or actual fraud or violation of the code of conduct of the Company as
prescribed under the Companies Act, 2013 and Clause 49 of the Listing
Agreement. This vigil mechanism shall provide a channel to the
employees and Directors to report to the management concerns about
unethical behaviour, and also provide for adequate safeguards against
victimization of persons who use the mechanism and also make provision
for direct access to the chairperson of the Audit Committee in
appropriate or exceptional cases. The Policy is available on the
website of the Company.
GENERAL
Your Directors state that no disclosure or reporting is required in
respect of the following items as there were no transactions on these
items during the period under review:
1. Details relating to deposits covered under Chapter V of the Act.
2. Issue of equity shares with differential rights as to dividend,
voting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of the
Company under any scheme save and except ESOS referred to in this
Report.
4. Neither the Managing Director nor the Whole-time Directors of the
Company receive any remuneration or commission from any of its
subsidiaries.
5. No significant or material orders were passed by the Regulators or
Courts or Tribunals which impact the going concern status and
Company's operations in future.
Your Directors further state that during the year under review, there
were no cases filed pursuant to the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013.
ACKNOWLEDGEMENT
Your Directors wish to convey their appreciation for the co-operation
and assistance received from the government, financial institutions,
bankers and stakeholders of your Company. The Board wishes to place on
record its deep appreciation for the integrity and hard work of its
employees at all levels to meet challenging markets.
Registered Office: By Order of the Board
19 R. N. Mukherjee Road S. S. SHAH
Kolkata 700 001 Chairman & Managing Director
Dated: The 30th May, 2015. |